Drug addiction is a medical condition. It can be a very serious and life-altering medical condition. This begs the question as to whether drug addiction or migraines be an excuse for filing a tax return late or for abating late filing penalties. The court addresses this in Jordan v. Commissioner, T.C. Memo. 2005-266, for a…
Tax Articles
Charitable Remainder Unitrust and NIMCRUT: Tax-Savvy Giving
Developing a tax strategy that allows for income and current income tax benefits is a key goal for many individuals and families. One potential solution to this challenge is to establish a charitable trust. These trusts can offer donors the ability to make a charitable gift while retaining an income stream from the donated assets,…
Taxes & Gay and Lesbian Marital Rights
This article is updated in 2023, given the significant changes to our tax laws that impact gay and lesbian couples. The U.S. Supreme Court issued several rulings that brought about significant changes to the tax treatment of same-sex marriages. The primary court case centered around the federal estate tax and the lack of a marital…
Can the IRS be Efficient and Effective at the Same Time?
The Internal Revenue Service (“IRS”) is responsible for assessing and collecting taxes, enforcing tax laws, and helping taxpayers comply with our laws. There are a number of varying policies and circumstances that the IRS has to get involved in while administering the tax system. This can put the IRS in odd positions. There can be…
Tax Aspect of the Bankruptcy Abuse Prevention & Consumer Protection Act
The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) was enacted by Congress to address the perceived bankruptcy abuses. The law made significant changes to the bankruptcy code, including new eligibility requirements, mandatory credit counseling, and the creation of the means test. While BAPCPA was primarily aimed at addressing bankruptcy-related issues, it also had significant…
Trust as the IRA Beneficiary: The RMD Conduit Trust
If you have an individual retirement account or IRA, you should have a plan for how the account’s assets will be distributed after you die. There are a number of tax planning strategies that can be used for this. Many IRA owners opt to name a beneficiary to receive the account’s funds after they die.…
Audit Reveals Deficiencies in IRS CDP Hearing Procedures
The Treasury Inspector General for Tax Administration (“TIGTA”) recently released a report on the IRS Office of Appeals program for its Collection Due Process (“CDP”) hearings. CDP hearings are an administrative procedure that allows taxpayers to appeal the filing of a lien or a notice of intent to levy by the IRS. The government audit…
IRS Can Force Business to Shut Down
There is something about the human condition where we expect reason to prevail. We expect that if given the opportunity to explain, reasonable parties who take contrary positions will agree. This is not always the case, and it is often not the case when it comes to the IRS. For example, many businesses that owe…
IRS Cannot Reject Payment Plan That is Too High
In the context of tax debt, the IRS offers taxpayers the option of submitting installment agreement requests to pay off their debts over time. However, the IRS also calculates a taxpayer’s “reasonable collection potential” to determine the amount that the taxpayer can reasonably pay toward their tax debt. If the IRS determines that the proposed…
Example of IRS Disclosure of Confidential Information
The IRS is prohibited from disclosing taxpayer information to third parties. There are a number of exceptions. But when the laws are violated, the courts can and do award damages to taxpayers. In Ward v. United States, 973 F. Supp. 996 (Dist. Colo. 1997), the court found that the IRS had violated the law by…